Japan Lifts Ban on Oregon White Wheat as GM Checks Start

A resumption of Japanese purchases may support wheat futures.

Japan will resume purchases of U.S. western-white wheat, lifting a two-month ban on the grain imposed after the discovery of unapproved gene-altered crop on an Oregon farm, said the agriculture ministry. Futures climbed.

"We will restart tenders to import western-white wheat on Aug. 1, while purchases of soft-white wheat for livestock feed are planned to resume on Aug. 7," said spokesman Fumihiro Michikura by phone today. Both types are grown in Oregon, where the GM wheat developed by Monsanto Co. was found.

A resumption of Japanese purchases may support wheat futures in Chicago, which have lost 15 percent this year on prospects for abundant global production, said Takaki Shigemoto, an analyst at JSC Corp. in Tokyo. The action also eased food industry concerns about short supply, as Japan depends on imports for almost 90 percent of its wheat, he said. Western- white wheat is used in Japan for production of cakes and cookies.

Japan established a system to detect the unapproved strain before shipment from the U.S., said Sunao Orihara, director for grain trade and operation of the Ministry of Agriculture, Forestry and Fisheries. The health ministry will also test U.S. wheat cargoes upon arrival to confirm supplies aren’t tainted.

The country is seeking to buy 89,579 metric tons of U.S. western-white wheat in the tender on Aug. 1, the agriculture ministry said today in a statement. Wheat for delivery in September on the Chicago Board of Trade gained 1.1 percent to $6.5875 a bushel at 4:17 p.m. in Tokyo.

Japan’s food-safety law bans sales of food containing GM crops that haven’t been confirmed safe by the nation’s health ministry. Contaminated supplies must be shipped back to exporting countries or disposed of.

Monsanto, USDA

The agriculture ministry bought 23,963 tons of club wheat grown in neighboring Washington state, 1,710 tons of U.S. soft- red winter, and 1,497 tons of Australian premium-white in a tender on July 11 as alternatives to the Oregon wheat.

Monsanto and the U.S. Department of Agriculture are investigating how a gene-altered plant that hasn’t been approved for commercial use was found on the Oregon farm eight years after nationwide field tests ended. After the USDA’s May 29 announcement, Japan, South Korea and Taiwan suspended some U.S. wheat purchases. South Korea and Taiwan have resumed buying.

The experimental wheat, designed to survive a weed killer called Roundup, may have gotten into an Oregon field by an "accidental or purposeful" act, Monsanto’s Chief Technology Officer Robb Fraley said last month.

The agriculture ministry controls overseas purchases and domestic sales of wheat to stabilize supply in Japan, which depends on imports for about 60 percent of its food. The U.S. is the world’s biggest exporter. The Consumers Union of Japan on June 4 asked the government to ban imports of all U.S. wheat to ensure food safety.

"We’ve come a long way in terms of the Ministry of Agriculture in Japan to reassure them," U.S. Agriculture Secretary Tom Vilsack said in an interview with Peter Cook on Bloomberg Television’s "Capitol Gains" that aired July 28.